WS Atkins' profits soar on Tube upgrade contracts

WS Atkins, the support services group, will dazzle the City with results revealing the extent to which companies are profiting from contracts to upgrade the London Underground.

Atkins' full-year pre-tax profits will exceed £56m, compared with £18.7m last year - well ahead of market expectations for 2004 of about £50m. The company will also at least double the 3p dividend it paid shareholders in 2003.

Turnover excluding joint ventures will come in at just under £1bn, compared with £935.3m in 2003. Earnings per share will come close to touching 40p compared with a loss per share last time of 41.1p.

Michael Jeffries, the chairman of Atkins, will tell analysts that his company has greatly benefited from its involvement with the London Underground Metronet PPP consortium.

Atkins' surge in profits will add to the controversy over the cost of the part-privatisation of the Underground network.

Related Articles

Last week the National Audit Office revealed that the total costs to the taxpayer of preparing for the part-privatisation of the Tube was £455m - all of which ended up in the hands of consultants, law firms and other professional advisers.

By contrast, advisers working on the £101bn takeover of Mannesmann by Vodafone were paid just £130m.

The NAO report also claimed that passengers on the Tube should not expect a better level of service for at least a decade.

Atkins' fees for bidding for the Metronet work have all been reimbursed by the Government.

Analysts also expect the company to say that it has made good progress in reducing costs and generating cash since Keith Clarke joined Atkins as chief executive in October last year. He replaced Robin Southwell, who resigned in October 2002 after a disastrous profits warning.